NEW DIRECTIONAL CALL PLAYS

O'Reilly Automotive - ORLY - close: 75.51 change: +1.09

Stop Loss: 73.85
Target(s): 82.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Shares of ORLY have held up reasonably well during the market's recent sell-off. The stock is only three points off its all-time high. Traders were buying the dips near $74 and its 30-dma the last couple of days. I do see short-term resistance at $76.00.

I am suggesting a trigger to open small bullish positions at $76.15. Our target is $82.50 but more conservative traders may want to exit in the $79.50-80.00 zone instead. FYI: The Point & Figure chart for ORLY is bullish with a $103 target.

Trigger @ 76.15

- Suggested Positions -

buy the DEC $75 call (ORLY1117L75) current ask $2.10

- or -

buy the JAN $80 call (ORLY1221A80) current ask $1.30

Annotated Chart:

Entry on November xx at $ xx.xx
Earnings Date 02/16/12 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on November 26, 2011


NEW DIRECTIONAL PUT PLAYS

Alliance Resource Partners - ARLP - close: 68.67 chg: -0.77

Stop Loss: 72.55
Target(s): 60.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
ARLP is a coal company. Unfortunately investors are turning bearish on coal stocks due to worries about a slowing global economy. Shares of ARLP have developed a bearish pattern of lower highs and lower lows dating back to its peak in March 2011.

Last week's low was $68.57. I am suggesting we use a trigger at $68.45 to buy puts and we'll use a stop loss at $72.55. It's a bit wide for a stop but ARLP can be a volatile stock. Our target is $60.50. FYI: The Point & Figure chart for ARLP is bearish with a $62 target.

NOTE: I would feel more comfortable buying the January puts to have more time but the spreads are too wide to trade. The spread on the December put (0.95/1.30) is arguably too wide already. We want to keep our position size small to limit our risk.

Trigger @ 68.45 (small positions)

- Suggested Positions -

buy the DEC $65 PUT (ARLP1117X65) current ask $1.30

Annotated Chart:

Entry on November xx at $ xx.xx
Earnings Date 01/30/12 (unconfirmed)
Average Daily Volume = 45 thousand
Listed on November 26, 2011


United Continental Holdings - UAL - close: 15.90 change: +0.37

Stop Loss: 16.55
Target(s): 12.75
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The rising cost of jet fuel is taking its toll on the airline industry again. UAL is just one of several big companies that are starting to shut down their smaller planes that seat 50 passengers or less. We see this as a sign that airlines are struggling and the downtrend in UAL's stock should continue.

I am suggesting bearish put positions at the open on Monday. We will try and limit our risk with a tight stop loss. Our target is $12.75 but more conservative trades may want to exit on a decline near $14.00, which might offer some support. FYI: The Point & Figure chart for UAL is bearish with a $13 target.

- Suggested Positions -

buy the DEC $15 put (UAL1117x15) current ask $0.50

- or -

buy the JAN $14 put (UAL1221M14) current ask $0.65

Annotated Chart:

Entry on November xx at $ xx.xx
Earnings Date 01/26/12 (unconfirmed)
Average Daily Volume = 5.0 million
Listed on November 26, 2011